Aeropostale, Foot Locker, 5 Others to Wrap Up Busy Retailers' Earnings Week

NEW YORK (TheStreet) -- The seven retailers profiled in this post will report their quarterly results on Thursday and Friday.

The bar has been raised by TJX Cos. (TJX) , the parent company of T.J. Maxx, Marshalls and HomeGoods that reported better-than-expected earnings on Tuesday.

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As I wrote on Monday, my take is that 60% of consumers feel that they can make ends meet, while 40% are living paycheck to paycheck. Sixty percent will look for bargains at discount stores such as T.J. Maxx, while the 40% may stretch their budgets to purchase items at those stores.

Ross Stores (ROST) followed TJX higher Tuesday on the presumption that school children want to dress in brand-name apparel discounted to meet their parents' budget. Ross Stores is down 7% year to date, but rose 4% on Tuesday.

Foot Locker (FL) is up 25% year to date. The stock kicked to all-time intraday high at $52.12 on Tuesday, testing a monthly risky level at $52.02, which is now a pivot.

Aeropostale (ARO) is the biggest loser year to date among the seven profiled here, down 57%. The stock popped 19% on Tuesday. The company is expected to post a quarterly loss after the closing bell on Thursday.

Here are today's stock profiles. Two "crunching the numbers" tables follow.

Ann Inc. (ANN) ($36.77) is up 0.6% year to date. The stock has traded as low as $30.71 on Feb. 5, and as high as $43.60 on March 21. It is just below its 200-day simple moving average of $37.48.

Analysts expect the clothing retailer to report earnings per share of 70 cents before the opening bell on Friday. Ann has a 12-month trailing price-to-earnings ratio of 17.9 and doesn't pay a dividend.

The weekly chart is negative but oversold with its five-week modified moving average at $37.65 and its 200-week SMA at $30.60. Weekly and annual value levels are $34.89 and $30.67, respectively, with monthly and semiannual risky levels at $39.39 and $44.98, respectively.

Aeropostale ($3.87) traded as low as $3.15 on Aug. 4. It popped above its 50-day SMA at $3.35 on Tuesday but remains well below its 200-day SMA of $5.91.

Analysts expect the company to report a loss of 59 cents per share after the closing bell on Thursday.

The weekly chart is oversold with its five-week MMA at $3.48. A weekly pivot is $3.22 with a semiannual risky level at $9.12.

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Buckle (BKE) ($46.93) is down 8.6% year to date. The clothing retailer traded as low as $41.45 on Feb.5, and rose above its 200-day SMA of $46.41 on Tuesday.

Analysts expect the company to report earnings of 53 cents per share before the opening bell on Thursday. Buckle has a 12-month trailing P/E ratio of 13.6 and dividend yield of 1.9%.

The weekly chart is positive with its five-week MMA at $45.56 and its 200-week SMA at $43.70. Weekly and annual value levels are $44.23 and $42.35, respectively, with annual and semiannual risky levels at $50.73 and $54.55, respectively.

Foot Locker ($51.96) has been above its 200-day SMA when it was $34.30 on Nov. 5, and traded at an all-time intraday high at $52.12 on Tuesday on expectations of strong earnings.

Analysts expect the company to report earnings of 54 cents per share before the opening bell on Friday. Foot Locker has a 12-month trailing P/E ratio of 16.1 and dividend yield of 1.7%.

The weekly chart is positive with its five-week MMA at $49.84. Quarterly and semiannual value levels are $49.40 and $47.93, respectively, with a monthly pivot at $52.02, which was a risky level tested on Tuesday. A semiannual risky level is $54.96.

Gap (GPS) ($42.69) is up 9.2% year to date. It traded at its 2014 low of $36.57 on Jan. 28, and set its 2014 intraday high at $44.59 on Feb.28. The stock has been above its 200-day SMA of $40.39 since Aug. 7.

Analysts expect the company to report earnings of 69 cents per share after the closing bell on Thursday. Gap has a 12-month trailing P/E ratio of 15.8 and dividend yield of 2.1%.

The weekly chart is positive with its five-week MMA at $41.47. Monthly and semiannual value levels are $39.89 and $36.65, respectively with a weekly pivot at $40.56 and semiannual and quarterly risky levels at $43.05 and $49.31, respectively.

Children's Place (PLCE) ($50.09) is down 12.1% year to date. The stock traded as high as $58.48 on Jan. 13, and as low as $44.54 on May 7. It has been below its 200-day SMA of $51.38 since March 6.

Analysts expect the company to report a loss of 44 cents per share before the opening bell on Thursday. Children's Place has a 12-month trailing P/E ratio of 16.2 and dividend yield of 1.1%.

The weekly chart is neutral with the stock between its five-week MMA at $49.68 and its 200-week SMA at $50.27. Weekly and monthly value levels are $48.41 and $46.86, respectively, with annual and quarterly risky levels at $51.18 and $53.25, respectively.

Ross Stores ($69.31) has been below its 200-day SMA of $70.18 since April 10, and traded as low as $61.83 on July 17.

Analysts expect the company to report earnings of $1.09 per share after the closing bell on Thursday. Ross has a 12-month trailing P/E ratio of 16.4 and dividend yield of 1.2%.

The weekly chart is positive with its five-week MMA at $66.55. Weekly and annual value levels are $62.74 and $62.09, respectively, with quarterly and semiannual risky levels at $70.80 and $82.31, respectively.

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Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics

This table provides the technical status for the stocks profiled in today's report.

The 12-month trailing price to earnings ratio

The Dividend Yield

There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.

The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.

Interpretations: Stocks below a moving average are listed in red.

Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.

A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.

A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.

A stock with a neutral technical rating has a profile that is not positive or negative.

The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three- to five-year horizon.

The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.

The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.

The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six to 12-month horizon.

Crunching the Numbers with Richard Suttmeier: Earnings & Where to Buy & Where to Sell

This table presents the EPS estimates including date and before or after the close, and where to buy on weakness and where to sell on strength.

Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.

Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.

At the time of publication, the author held no positions in any of the stocks mentioned.

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This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

TheStreet Ratings team rates FOOT LOCKER INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate FOOT LOCKER INC (FL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 0.3%. Since the same quarter one year prior, revenues rose by 14.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FL's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 45.46% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • FOOT LOCKER INC has improved earnings per share by 22.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FOOT LOCKER INC increased its bottom line by earning $2.85 versus $2.59 in the prior year. This year, the market expects an improvement in earnings ($3.30 versus $2.85).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Specialty Retail industry average. The net income increased by 17.4% when compared to the same quarter one year prior, going from $138.00 million to $162.00 million.
Richard Suttmeier is the chief market strategist at ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.

Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.

Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at RSuttmeier@Gmail.com

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